A contract's duration dictates rights to extension; courts may not interfere in administrative tender decisions without compelling evidence of arbitrariness.

JUDGMENT :

B.R. SARANGI, J.

1. The petitioner has filed this writ petition seeking to quash the Tender Call Notice dated 26/27.11.2020 under Annexure-9 series; and to direct the opposite parties to approve the extension of the appointment of the petitioner for a further period of two years, i.e. from 03.01.2021 to 02.01.2023 as per the terms of contract, in view of the recommendation made by opposite party no.3 on 27.10.2020 under Annexure-6; and to direct opposite party no.3 to release the arrear dues of Rs.1,40,00,000/- along with subsequent pending dues of the petitioner forthwith.

2. The factual matrix of the case, in brief, is that opposite party no.3 floated an e-tender call notice on 08.08.2016 for empanelment of Chemists for CGHS for three years, i.e. 2016-2019 with the terms and conditions specified therein. The petitioner participated in the tender process and became successful. Accordingly, the petitioner executed the agreement for a period of one year on 03.11.2016. But subsequently the said agreement was renewed on 02.11.2017 and 02.11.2018 for one year extension in each spell. Another advertisement was issued by the opposite party no.3 on 26.04.2019 for empanelment of Chemists for CGHS for a period of three years on expiry of earlier tender with same terms and conditions of 2016. Since the tender process was continuing, the appointment of the petitioner was extended from 03.11.2019 to 02.12.2019 with the same terms and conditions, as per the appointment order dated 03.11.2016. Again, the agreement was extended from 03.12.2019 to 02.01.2020 because of the delay in finalization of the tender. In the meantime, the petitioner participated in the process of tender, pursuant to the e- tender call notice dated 26.04.2019. Though the advertisement was issued for three years, the petitioner, being the successful bidder, entered into an agreement with opposite party no.3 on 03.01.2020 for a period of one year. While the contract was subsisting, opposite party No. 3 wrote a letter on 27.10.2020 to opposite party no.2 for approval of extension of appointment of the petitioner for two years, i.e. from 03.01.2021 to 02.01.2023. The petitioner also wrote a letter on 13.11.2020 to opposite party no.3 to release the arrear dues. But, instead of extending the period, as had been recommended, opposite party no.2 wrote to opposite party no.3 for initiation of fresh tender call notice, vide letter dated 16.11.2020. Pursuant thereto, opposite party no.3 floated the tender call notice on 26.11.2020 for a period of three years by enhancing the EMD amount from Rs.30,000/- to around Rs.14.00 lakhs. Therefore, the petitioner has approached this Court by filing the present writ petition.

3. Mr. S.K. Dalai, learned counsel for the petitioner contended that though the tender floated on 26.04.2019 was for a period of three years, the agreement was executed with the petitioner on 30.12.2019 for a period of one year. Therefore, before expiry of such period of one year, as per the normal practice, extension was to be given in favour of the petitioner for a period of another two years and, as such, opposite party no.3 had also written a letter to opposite party no.2 for extension of such period. However, opposite party no.2, without acceding to the request made by opposite party no.3, wrote a letter to opposite party no.3 to initiate fresh tender, pursuant to which, the tender call notice was issued on 26.11.2020. Thereby, the authorities have acted arbitrarily and unreasonably, for which the petitioner has approached this Court in the present writ petition.

4. Mr. C.K. Pradhan, learned Senior Panel Counsel for the Union of India, contended that admittedly the notice inviting tender was for a period of three years, but while executing the agreement, the petitioner entered into the agreement for a period of one year and, more so, that period has not been extended by the authority. Apa